Record numbers of wealthy Americans plan to leave America

A version of this article first appeared in CNBC’s Inside Wealth newsletter by Robert Frank, a weekly guide for high-net-worth investors and consumers. Sign up to receive future editions directly to your inbox.

Immigration lawyers say more wealthy Americans are making plans to leave the United States ahead of Tuesday’s election, with many worried about political and social unrest no matter who wins.

Lawyers and advisers to family offices and wealthy families say they are seeing record demand from clients seeking second passports and long-term stays abroad. Talk of moving abroad after the election is common, but this time many wealthy people have already taken action, wealth advisers said.

“There has never been a demand like this,” said Dominik Volek, head of private clients at Henley & Partners, which advises high-net-worth individuals on moving abroad.

Volek said for the first time that wealthy Americans are the company’s largest customer base, accounting for 20% of the company’s business, or more than any other nationality. He said the number of Americans making plans to move abroad has increased by at least 30% compared to last year.

David L’Esperance, managing partner at L’Esperance & Associates, an international tax and immigration firm, said the number of Americans he hires to potentially move abroad has nearly tripled since last year.

Fifty-three percent of wealthy Americans say they are likely to leave the United States after the election, regardless of who wins, according to a survey by Arton Capital, which advises wealthy Americans on immigration programs. Young billionaires are most likely to leave, with 64% of billionaires aged 18 to 29 saying they are “very interested” in obtaining a so-called golden visa through an overseas investment residency program. “There is,” he replied.

Indeed, interest in second passports and residency rights has steadily increased among wealthy Americans since the coronavirus outbreak. Whether it’s to retire to a warmer, cheaper country or to be closer to family overseas, wealthy people have many reasons to travel abroad for reasons other than politics.

The ultra-wealthy also increasingly see citizenship in one country as a concentration of personal and economic risk. They are creating “passport portfolios” to diversify their investments and hedge against country risk. Some people seek a non-U.S. passport in case they travel to dangerous countries or regions that are hostile to the United States.

But the election and political climate are accelerating and spurring wealthy Americans to consider a Plan B overseas. For more than 30 years, L’Esperance said, his U.S. clients have been interested in moving abroad primarily for tax reasons. Now, the issue is fear of politics and violence, and next week’s election will further fuel those fears.

“For some of them, the number one reason is ‘I don’t want to live in MAGA America,'” L’Esperance said. Some fear violence if Donald Trump loses and Vice President Kamala Harris’ plan to tax unrealized capital gains of more than $100 million. Tax analysts say the unrealized gains plan has little chance of passing Congress, but even with a Democratic majority, L’Esperance said there is still a risk.

“Even if there’s only a 3% chance of it happening, you still want to be insured,” he said.

Lawyers said the wealthy also cited school shootings, potential political violence, anti-Semitism, Islamophobia and rising government debt as reasons for leaving.

When it comes to destinations, Americans primarily look to Europe. Henry said Portugal, Malta, Greece, Spain and Antigua are among the top countries where Americans seek residency or second citizenship. Italy is also popular with Americans.

“The love affair between Americans and Europeans has been going on for a very long time,” said Armand Arton of Arton Capital. “It comes at a cost, but they have no problem investing hundreds of thousands or $500,000 in real estate or funds.”

However, rules and costs are changing rapidly. While mass immigration has become a hot political issue around the world, some European politicians have begun to oppose golden visas, which grant citizenship and residency rights to wealthy people purely on the basis of investment.

Portugal, for example, faced a backlash after large numbers of foreigners flooded into the Algarve and bought beach property as part of its Golden Visa programme. As property prices soared by 15%, the government changed the rules, increasing the minimum investment threshold and removing residential property from the investment category.

This summer, Italy doubled the flat tax on overseas income of wealthy foreigners who moved to Italy to 200,000 euros ($217,000). The changes boosted real estate prices in Milan following a wave of wealthy new immigrants who arrived because of the program.

For now, Malta remains the go-to second passport for wealthy Americans. Immigration lawyers say Malta’s citizenship-by-investment program is expensive, around $1 million to $1.2 million all-in, but provides citizenship and unlimited travel and residence rights to Malta and, by extension, the European Union. The EU is challenging the Malta program in court, but most immigration lawyers expect the country to prevail.

The Caribbean is becoming increasingly popular among Americans who simply want a second passport. Buying approved real estate in Antigua and Barbuda for $300,000 or more puts you on the path to citizenship, which allows you free travel to Hong Kong, Russia, Singapore, the United Kingdom, Europe and more. Lawyers say St. Lucia’s popularity is also growing.

Americans with ancestry from Ireland, Italy and dozens of other countries can apply for so-called descent citizenship, which is usually much cheaper than an investment visa. Some countries, such as Portugal, also offer retirement visas that allow entry and a path to citizenship.

Don’t expect to get citizenship or residency right away. This process can take months, even a year or more, because lawyers and states are inundated with so many applications and so many different background checks and approvals are required. . And depending on the outcome of the election, the waiting list could get even longer.

“It’s getting crowded,” L’Esperance said. “And I’m sure we’ll get a lot more on November 6th or 7th.”